Rubio’s proposal isn’t gaining steam. Senate Finance Committee Chairman Chuck Grassley defends buybacks as a way for corporations and their shareholders to re-allocate capital.
There’s a misconception that after “stock buybacks the money goes up in smoke,” Grassley said. “If a company has billions overseas and it isn’t doing them any good and they bring it back and buy stock and it goes to the stockholders who can invest it in something that is productive.”
Rubio said that despite discussions with members of Senate Finance Committee, he’s the only signature on the bill. He’s also unlikely to gain the backing from outside groups. The right-leaning Club for Growth said raising taxes to fix a “perceived inequality” is the wrong solution.
And even though Rubio’s plan plays right into Democratic talking points, they’re going their own way. Senate Minority Leader Chuck Schumer and Senator Bernie Sanders, who is running for the 2020 presidential nomination, have their own plan that would block corporations from repurchasing their shares unless they pay all their workers at least $15 an hour.
Michael Linden, a fellow at the left-leaning Roosevelt Institute said the sentiment is one that many Democrats back.
“Welcome to the left, Marco Rubio,” he said.
This article was provided by Bloomberg News.